All Forum Posts by: Clarence Johnson

In my experience it is difficult to get traditional HELOC's on non owner occupied properties. I love HELOCS because origination cost are low, and they are reusable. If you find a bank willing to do it please share.

@Aaron Harris sent you msg with bank info. Def refi now to try to avoid the non owner occupied hit you will take on the rate. If rates drop and you take the hit for non occupied there will be no gain. Also it will be impossible to get a conventional HELOC on a non occupied property.

@Aaron Harris congrats, that was a prime time to get in the city with little to no competition. I do not believe that selling is in your best interest as the city is early in its growth and there's more appreciation to be had. If you have MI I would probably refi to get rid of it while rates are pretty competitive. Your opportunity to refi with an owner occupied rate as opposed to the investor rate will be gone when you rent the property (technically). Also, I like the idea of using a HELOC for ADU conversion cost, rather than a cash out refi where you would take a hit on the rate and only be able to use once. Last, you seem to be factoring about $170k for the cost of the ADU, I have seen people do conversions for less than $70k and ground up builds for about $130k. The HELOC is better than a cash out because cost of origination is very cheap, I use a local bank in Gardena, and you can pay it off and reuse it again without doing costly refis to tap into equity. Let me know if you have any questions.

@Chris Mason I searched and cannot find the comment re the impact adding the ADU can have. Can you please copy paste or post a link. I'm repping a buyer on an SFR/legal ADU deal in Carson and after multiple revisions and QC request the appraisal came in very low today. They gave the ADU no value, and would not even factor it into the square footage. This morning I discovered that FHA appraisal guidelines only give value to attached ADUs with interior access from the primary residence, I played stupid and requested a revision while looking into conventional guidelines. Hoping they do not know the FHA guideline so we can push the value. Thanks for sharing.

@Wayne Brooks is right, no broker would allow you to hang your license without membership of state and local organizations, E&O insurance etc. Not knowing how to do the paperwork can cost more than the commission your trying to save, winter is coming and you don't want to become some frustrated summer buyers deal. I know a good San Diego agent if you need further direction feel free to reach out.

I house hacked a duplex in Inglewood. I would suggest living in it for the 1 year required by FHA and scaling up to a condo, and then scaling to a Sfr. Don't sell unless your taking proceeds out of state for cashflow, otherwise your just paying taxes (or not) and buying in the same competitive mkt you just sold in. Your Sfr can have an ADU or you can add the ADU and you can later buy another larger/farther Sfr, all for 3.5% down. #Blueprint

Congrats, its hard to find a good GC anywhere, but especially in LA. I understand the attachment, just had to sell my grandmothers hs in Gardena (did an angel rehab for free) and my other grandma stays in Lynwood on Carlin. Legacy is everything! Do remember that if you need to pay private loans or just be more liquid that many banks will do HELOCS up to 90% LTV.

No experience in regards to the assessor but I have clients who built ADU's and the RSO notified them that the property now falls under the city rent control ordinance due to being a multifamily property. They are appealing this.

You could possibly find a 1 bed condo in the Southbay, Gardena, Inglewood, San Pedro, Hawthorne.  All, in my opinion, are in the path of progress.  I would also add Long Beach to this list.